CA312 Chapter 12 Key Terms
South-Western Federal Taxation 2015: Corporations, Partnerships, Estates and Trusts, 38th Edition
Terms in this set (6)
S corporation, 12-2
The designation for a small business corporation. See also Subchapter S.
Subchapter S, 12-2
Sections 1361-1379 of the Internal Revenue Code. An elective provision permitting certain small business corporations (§ 1361) and their shareholders (§ 1362) to elect to be treated for income tax purposes in accordance with the operating rules of §§ 1363-1379. S corporations usually avoid the corporate income tax, and corporate losses can be claimed by the shareholders.
Voluntary revocation, 12-9
The owners of a majority of shares in an S corporation elect to terminate the S status of the entity, as of a specified date. The day on which the revocation is effective is the first day of the corporation's C tax year.
Accumulated adjustments account (AAA), 12-14
An account that aggregates an S corporation's post-1982 income, loss, and deductions for the tax year (including nontaxable income and nondeductible losses and expenses). After the yearend income and expense adjustments are made, the account is reduced by distributions made during the tax year. See also Other adjustments account (OAA).
Accumulated earnings and profits (AEP), 12-14
Net undistributed tax-basis earnings of a corporation aggregated from March 1, 1913, to the end of the prior tax year. Used to determine the amount of dividend income associated with a distribution to shareholders. See also current earnings and profits and earnings and profits. § 316 and Reg. § 1.316-2.
Other adjustments account (OAA), 12-17
Used in the context of a distribution from an S corporation. The net accumulation of the entity's exempt income (e.g., municipal bond interest).
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